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Britain Did Not Develop India, India Developed Britain!

Author: Savio Rodrigues
Publication: Goachronicle.com
Date: August 15, 2022
URL:      https://goachronicle.com/britain-did-not-develop-india-india-developed-britain/

Today India celebrates 75-years of Independence. We must value it and we must respect it.

Britain did not give us Indian our freedom out of the kindness of their heart, our nation’s founding leaders fought for our rights to be a nation of free people and an Independent India.

On this day, I would like throw light on some very interesting research done by the renowned economist Utsa Patnaik which was published by Columbia University Press. It is important focus on certain moot points in this research because in India even today there are people who suffer from a colonial hangover and think Britain developed India. Most people in Britain assume that Britishers brought culture and civilisational ethos to the people of India, because they saw us as being as land of snake-charmers.

The primary truth revealed in the research is that Britain drained a total of nearly USD 45 trillion from India during the period 1765 to 1938.

The research revealed that the East India Company began collecting taxes in India, and then cleverly used a portion of those revenues (about a third) to fund the purchase of Indian goods for British use. In other words, instead of paying for Indian goods out of their own pocket, British traders acquired them for free, “buying” from peasants and weavers using money that had just been taken from them. The re-export system allowed Britain to finance a flow of imports from Europe, including strategic materials like iron, tar and timber, which were essential to Britain’s industrialisation.

In the colonial era, most of India’s sizeable foreign exchange earnings went straight to London—severely hampering the country’s ability to import machinery and technology in order to embark on a modernisation path similar to what Japan did in the 1870s. The scars of colonialism still remain, Patnaik opined.

In a interview to a leading newspaper in India in 2018, Patnaik stated, “Between 1765 and 1938, the drain amounted to £9.2 trillion (equal to $45 trillion), taking India’s export surplus earnings as the measure, and compounding it at a 5 percent rate of interest. Indians were never credited with their own gold and forex earnings. Instead, the local producers here were ‘paid’ the rupee equivalent out of the budget—something you’d never find in any independent country. The ‘drain’ varied between 26-36 percent of the central government budget. It would obviously have made an enormous difference if India’s huge international earnings had been retained within the country. India would have been far more developed, with much better health and social welfare indicators. There was virtually no increase in per capita income between 1900 and 1946, even though India registered the second largest export surplus earnings in the world for three decades before 1929.”

She further added in that interview that ordinary people died like flies owing to under-nutrition and disease. It is shocking that Indian expectation of life at birth was just 22 years in 1911. The most telling index, however, is food grain availability. Because the purchasing power of ordinary Indians was being squeezed by high taxes, the per capita annual consumption of food grains went down from 200kg in 1900 to 157kg on the eve of World War II, and further plummeted to 137kg by 1946. No country in the world today, not even the least developed, is anywhere near the position India was in 1946.

A third of India’s budgetary revenues was not spent domestically but was set aside as ‘expenditure abroad’. The secretary of state (SoS) for India, based in London, invited foreign importers to deposit with him the payment (in gold and sterling) for their net imports from India, which disappeared into the SoS’s account in the Bank of England. Against these Indian earnings he issued bills, termed Council bills (CBs), to an equivalent rupee value—which was paid out of the budget, from the part called ‘expenditure abroad’. So, Britain had complete command over all the international purchasing power that Indian producers had earned. Even if a part of it had been credited to India, we could have imported modern technology and started industrializing long before Japan did under the Meiji restoration in the 1870s, Patnaik’s research indicated.

Patnaik in her research published also pointed out that the cost of all Britain’s wars of conquest outside Indian borders were charged always wholly or mainly to Indian revenues.

India was running an impressive trade surplus with the rest of the world – a surplus that lasted for three decades in the early 20th century – it showed up as a deficit in the national accounts because the real income from India’s exports was appropriated in its entirety by Britain.

The whole of today’s advanced capitalist world flourished on the drain from India and other colonies. Britain was too small to absorb the entire drain from colonial India. So, it became the world’s largest capital exporter, which aided the industrial development of Continental Europe, the U.S., and even Russia. The infrastructure boom in these countries would not have been possible otherwise.

According to Patnaik, the colonial drain from India helped to create the modern capitalist world, from North America to Australia—all regions where European populations had settled. The advanced capitalist world should set aside a portion of its GDP for unqualified annual transfers to developing countries, especially to the poorest amongst them. Britain, in particular, morally owes reparations for the 3 million civilians who died in the Bengal famine because it was an engineered famine.

Patnaik through her research papers draws us to an important fact that most Indians and Britishers overlook and it does not matter whether we accept it as the truth or not: Britain did not develop India, India developed Britain. That is the brutal fact. Britain colonial intent was not common wealth but wealth only for Britain that was not that common from their colonies.


-Savio Rodrigues Founder & Editor-in-Chief GoaChronicle.com

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